Canada

Canada – Exciting Opportunities

 

Modern, dynamic, progressive and welcoming are just a few words that describe Canada’s business environment. Our country is a long-established leader in such natural resource industries as agriculture, mining and energy.  Today, Canadian businesses are increasingly recognized around the world for innovation, quality and leadership across a wide range of other advanced industries, including aerospace and automotive manufacturing, digital media and software, and  business and financial services.

In what continues to be economic challenging times around the world, Canada remains a solid place to do business.  In fact, influential commentators like Forbes Magazine[1] and the Economist Intelligence Unit[2] cite Canada as one of the best places in the world to succeed in business today and global players like Microsoft, Electronic Arts, Toyota, Samsung and Pfizer are expanding their horizons in Canada.

A part of this lies in Canada’s strong and consistent economic record. At US$1.57 trillion, Canada’s economy is the world’s tenth largest[3], larger than Russia or South Korea. Some 27 Financial Times “Global 500” companies are headquartered in Canada, contributing to a vibrant corporate community which has more top global companies than Germany, India, Brazil, Russia or Italy.[4] Since 2008, our national economy has grown faster than any other G-7. In fact, ours is the only G-7 economy to have regained more than all of the output and the jobs lost during the recent global downturn. Some are projecting that Canada will continue to lead the G-7 in growth through 2012.[5]

Having entered the global economic downturn with a strong record of balanced budgets and low debt, Canada is also in better financial shape than many. Despite a $62 billion stimulus program, we expect to return to budget surplus by 2015-16.  Our net debt-to-GDP ratio is projected to decline to 31.7 percent by the 2015-16 Fiscal Year, about half that of our nearest G-7 peer.

Canada’s core financial strength extends beyond public finances.  The World Economic Forum says Canada has the world’s strongest banking system.[6] Global Finance magazine says six of the 10 safest banks in North America are Canadian. [7] At a time when financial institutions around the world were collapsing, no Canadian bank or insurer failed and none required bailouts. Such strength and stability provide sound foundations for business endeavour and success.

Canada also offers potential investors some key cost advantages. Overall business operating costs in Canada are the lowest in the G-7, five percent lower than in the U.S. and up to 12 percent lower in R&D intensive sectors.[8] Taxes are also lower in Canada. The overall tax rate on new business investment is substantially lower in Canada than anywhere in the G-7. As well, Canada’s combined federal-provincial statutory general corporate income tax rate of 26% is below the level of most other G 7 countries and more than 13 percentage points lower than that of the U.S. Canada is also the first in the G-20 to make itself a “tariff free zone” for manufacturers, meaning companies there can now import the machinery and equipment they need without paying tariffs. Furthermore, we allow accelerated capital cost allowance treatment for investments in machinery and equipment. Such cost advantages translate into higher profit margins for companies operating in Canada.

Many of the world’s top innovators are attracted to Canada’s winning conditions for research and innovation. Indeed, the top 25 corporate R&D spenders in Canada include familiar names like IBM, Pratt & Whitney, Alcatel-Lucent, Ericsson, GlaxoSmithKline and Sanofi-aventis.  And why not? Canada offers some of the most generous R&D tax incentives in the industrialized world (combined federal and provincial tax credits can save foreign investors up to 30 cents on the dollar invested in R&D in Canada). All across the country, in world-class universities, public research institutions, research and technology parks and public-private R&D networks one can find vibrant cultures for research collaboration and technology transfer.  Everyday, researchers and scientists in Canada are advancing the frontiers of science and tranforming that knowledge into commercial opportunities and profits.

Canada’s research and innovation advantage is soundly anchored in the talent and diversity of its people. Our country boasts a highly educated, flexible and multicultural workforce that is well suited for today’s knowledge-based economy. We have one of the world’s best educated workforces, with the second highest proportion of post-secondary graduates in the industrialized world.[9] The availability of qualified engineers in Canada is the highest in the G-7.[10] Our post-secondary schools rank among the world’s best.[11] Over 200 languages are spoken in Canada.  One in five Canadians speak a language other than English or French.  Such talent, skills and diversity are exceptionally well-suited for thriving in a global marketplace.

In today’s challenging business environment, global companies seeking to grow, innovate and thrive should take another look at Canada.  Opportunity is closer than you think.

Canada’s Investment Advantages

  • Lowest overall tax rate on new business investment in the G-7
  • Lowest overall business costs in the G-7
  • Best place in G-7 to do business for the next five years (2012–2016)
  • Lowest debt burden in the G-7
  • World’s soundest banking system
  • One of the highest proportion of post-secondary graduates in the OECD
  • Strong track record for industry-government-academic collaboration in research and innovation
  • First G-20 country to offer a tariff-free zone for imports of machinery and equipment

 


[1] In October 2011, Forbes Magazine ranked Canada #1 place to do business.

[2] The Economist Intelligence Unit’s (EIU) Business Environment Ranking places Canada No. 1 in the G-7 and No. 5 in the world as a country in which to conduct business over the 2012– 2016 period

[3] As measured by Gross Domestic Product (GDP) at market exchange rates.

[4] Financial Times “Global 500”, December 2010. Prices and market values at 31 December 2010.

[5] The International Monetary Fund (IMF) predicts that Canada and Germany will have the fastest economic growth in the G-7 in 2011 and 2012.

[6] World Economic Forum – Global Competitiveness Report 2011-2012

[7] Global Finance Magazine “The World’s 50 Safest Banks”, 2011.

[8] KPMG Competitive Alternatives, 2010. KPMG’s guide to international business costs again finds Canada leading the G-7 in low business costs.

[9] OECD Education at a Glance, 2010.

[10] According to the Swiss-based Institute for Management Development.

[11] The World Economic Forum, Global Competitiveness Report, 2011-2012.